2003 SAMPLE COSTS TO ESTABLISH AN APRICOT ORCHARD AND PRODUCE APRICOTS · 2015-04-02 · 2003...

AC-SJ-03-1

UNIVERSITY OF CALIFORNIA COOPERATIVE EXTENSION

2003

SAMPLE COSTS TO ESTABLISHAN APRICOT ORCHARD AND PRODUCE

APRICOTSFRESH MARKET

SAN JOAQUIN VALLEYMicro-Sprinkler Irrigation

Kathleen Kelley Anderson UCCE Farm Advisor, Stanislaus CountyKevin R. Day UCCE Farm Advisor, Tulare CountyHarry L. Andris UCCE Farm Advisor, Fresno CountyWilliam B. Coates UCCE Farm Advisor, San Benito CountyWilliam C. Ferriera President, Apricot Producers of CaliforniaStephen M. Southwick UCCE Extension Specialist, Department of Pomology, UC DavisKaren A. Klonsky UCCE Extension Specialist, Department of Agricultural and Resource

Economics, UC DavisRichard L. De Moura Research Associate, Department of Agricultural and Resource Economics, UC

Davis

2003 Apricots Cost and Return Study (Fresh Market) San Joaquin Valley UC Cooperative Extension 2

UNIVERSITY OF CALIFORNIA COOPERATIVE EXTENSION

SAMPLE COST TO ESTABLISH an APRICOT ORCHARDand PRODUCE APRICOTS for FRESH MARKET

San Joaquin Valley - 2003

CONTENTS

INTRODUCTION ................................................................................................................................................. 2ASSUMPTIONS.................................................................................................................................................... 3 Establishment Cultural Practices and Material Inputs ......................................................................................... 3 Production Cultural Practices and Material Inputs .............................................................................................. 5 Cash Overhead ..................................................................................................................................................... 7 Non-Cash Overhead............................................................................................................................................. 8REFERENCES..................................................................................................................................................... 10Table 1. SAMPLE COSTS PER ACRE TO ESTABLISH AN APRICOT ORCHARD................................... 11Table 2. COSTS PER ACRE TO PRODUCE APRICOTS................................................................................ 13Table 3. COSTS AND RETURNS PER ACRE TO PRODUCE APRICOTS................................................... 14Table 4. MONTHLY CASH COSTS – APRICOTS.......................................................................................... 16Table 5. RANGING ANALYSIS ....................................................................................................................... 17Table 6. WHOLE FARM EQUIPMENT, INVESTMENT, AND BUSINESS OVERHEAD COSTS............. 18Table 7. HOURLY EQUIPMENT COSTS ........................................................................................................ 19Table 8. OPERATIONS WITH EQUIPMENT.................................................................................................. 20

INTRODUCTION

Sample costs to establish an apricot orchard and produce apricots under micro-sprinkler irrigation in theSan Joaquin Valley are presented in this study. This study is intended as a guide only, and can be used to makeproduction decisions, determine potential returns, prepare budgets and evaluate production loans. Practicesdescribed are based on production practices considered typical for the crop and area, but will not apply to everysituation. Sample costs for labor, materials, equipment and custom services are based on current figures. Ablank column, “Your Costs”, in Tables 2 and 3 is provided to enter your costs.

The hypothetical farm operation, production practices, overhead, and calculations are described underthe assumptions. For additional information or an explanation of the calculations used in the study call theDepartment of Agricultural and Resource Economics, University of California, Davis, (530) 752-3589 or yourlocal UC Cooperative Extension office.

Sample Cost of Production Studies for many commodities are available and can be requested throughthe Department of Agricultural and Resource Economics, UC Davis, (530) 752-4424. Current studies can bedownloaded from the department website http://coststudies.ucdavis.edu or obtained from the local county UCCooperative Extension offices. Some archived studies are also available on the website.

University of California and the United States Department of Agriculture, Risk Management Agency, cooperating

The University of California does not discriminate in any of its policies, procedures or practices. The university is an affirmative action/equal opportunity employer.


ASSUMPTIONS

The assumptions refer to Tables 1 to 8 and pertain to sample costs to establish an orchard and produceapricots for the fresh market in the San Joaquin Valley under micro-sprinkler irrigation. Practices describedrepresent production practices and materials considered typical of a well-managed orchard in the region. Thecosts, materials, and practices shown in this study will not apply to all situations. Establishment and productioncultural practices vary by grower and the differences can be significant. The use of trade names and culturalpractices in this report does not constitute an endorsement or recommendation by the University ofCalifornia nor is any criticism implied by omission of other similar products or cultural practices.

Land. The hypothetical farm consists of 100 contiguous acres farmed by the owner. Apricotestablishment and production are on 20 acres and other tree crops are planted on 75 acres. Roads, irrigationsystems and farmstead occupy 5 acres.

Establishment Operating Costs

Only a few apricot orchards have been planted in the last ten years, therefore information on orchardestablishment costs from apricot growers are limited. Establishment information in this study is derived fromfarm advisors, plum and peach costs studies and former apricot cost studies.

Land Preparation. The new orchard is planted (established) on land previously planted to trees orvines. The land is assumed to be well drained and either a class I or II soil.

Orchard Removal. In September the trees are pushed over and removed by a commercial operator. Thecost includes removing the trees and orchard cleanup – stump removal, root removal and general cleanup byhand. Fees vary considerably for orchard removal.

Land Preparation. The field is ripped two to three feet deep in two directions to break up layered orcompacted soil. In the southern portion of the valley, it is common to rip to four feet in a single pass. The fieldis then laser leveled. The land is disked two times in different directions, the tree row fumigated using Telone,and berms made. Custom operators do the operations, including fumigation, to prepare the orchard for planting.Methyl Bromide fumigation untarped will cost over $1,500 per acre. Most land preparation is done in the yearprior to planting, but costs are shown in the first year.

Planting. In January, contract labor companies who specialize in orchard planting do the plantingoperation. They dig the planting holes, plant, prune (top), and place a tree guard around the trunk. The treeguards protect against above ground rodents, herbicide sprays, and sunburn. In the second year, 2% or 3 treesper acre are replanted.

Trees. No specific variety is planted in this study. Representative varieties may include but are notlimited to Castlebright, Poppy, Lorna, Helena, and Patterson. Planting densities may range from 110 to 250trees per acre. In this study, 145 trees per acre are planted on a 15-foot X 20-foot spacing. The life of theorchard at the time of planting is estimated to be 20 years.


Fertilization. Fertilizer rates in this study are typicalnutrient requirements, but do not take into account soil and waternitrogen. In the first year, Nitrogen (N) as ammonium nitrate isapplied in July. The fertilizer is hand applied near the base of thetrees. Beginning in July of the second year, the Nitrogen as UN32 is applied through the micro-sprinklersystem. Annual rates of actual N used in this study are shown in Table A. Leaf samples are taken in July fornutrient analysis and the fertilizers applied according to analysis recommendations.

Training/Pruning. Training and pruning in the first year is done during the dormant season –December in this study. Beginning in the second year pruning is done in July and/or August. The trees aremechanically topped in the fifth and subsequent years. A labor contractor does the pruning and stacks theprunings in the row middles. The grower shreds the prunings using a flail mower/shredder.

Irrigation. Water is pumped from a reservoir, through an infiltration system intothe micro-sprinkler system. In this study water costs $2.92 per acre-inch and thepumping cost $3.63 per acre-inch. No assumption is made about effective rainfall.The drip irrigation line is laid out in January after planting at which time 2 acre-inches ofwater is applied to the trees. Bubblers are used at each tree for irrigation through the firstyear. The micro sprinklers are installed in the second year and moved to the center ofthe trees. The amount of water applied each year is shown in Table B.

Pest Management. The pesticides and rates mentioned in this cost study as well as other materialsavailable are listed in UC Integrated Pest Management Guidelines, Apricots available online atwww.imp.ucdavis.edu. Pesticides mentioned in the study are commonly used, but are not recommendations.

Weeds. In January after the trees are planted, the tree row is sprayed with Surflan and Goal. Theresident vegetation in the row middles is allowed to grow and the middles are mowed three times – February,April and June. Beginning in the first year and in subsequent years a spot spray using Roundup is applied to thetree row in March, May and July.

Insects. Beginning in the second year, a delayed dormant spray in January or early February withSuperior Oil, Asana, and Kocide (copper) controls peach twig borer (PTB), San Jose scale (SJS), aphids andmite eggs. Pesticide label rates are reduced during the first two years, because of the small tree size – 50% and75% respectively.

Diseases. In the third year, brown rot, shothole, and powdery mildew are treated at full bloom withRally and Ziram.

Vertebrates. Beginning in the second year, gophers in this study are managed with poison bait appliedin the spring. The cost includes the bait, labor and All Terrain Vehicle (ATV) use.

Table A. Applied Actual NitrogenYear: 1 2 3 4 5 6+

lbs/acreN: 12 24 40 75 75 75

Table B. Applied Water

Year AcIn/Yr1 202 243 30

4+ 36


Harvest. Hand harvesting for apricots begins in the third year. SeeHarvest in production section for procedures.

Yields and Returns. Estimated annual yields for apricots are measuredin tons or boxes. Estimated yields in tons are shown in Table C.

Production Operating Costs

Pruning. The trees are topped mechanically and are hand pruned in July and/or August. Pruning costsinclude the hand pruning and labor for stacking the prunings in the row middles for shredding. The growerchops the prunings with a flail mower/shredder. Tree vigor, size, spacing, previous pruning, and limb diseaseare a few of the factors that can affect pruning costs and may be much higher or lower than those in the study.In some situations, pruning may require the removal of limbs too large to be shredded. When this happens, thegrower pushes or hauls the limbs to a pile at the edge of the orchard and burns the material.

Fruit/Flower Thinning. In April the fruit are thinned by hand using contract labor. Small fruit in Aprilmay be thinned by hand, by hand using mallets or with mechanical trunk shakers. Total thinning costs vary bythe grower’s approach, crop set, and the number of trees per acre. Thinning costs by growers participating inthe study ranged from $650 to $1,500 per acre. Fruit thinning increases fruit size and is necessary to meet thefresh market fruit size requirements. Fresh market minimum is currently 7 to 8 fruit per pound. Early thinning,done well in advance of tip hardening, is necessary for best size enhancement. Some growers are also flowerthinning using mechanical trunk shakers just after bloom in late February or early March.

Girdling. The practice of removing a thin strip of bark down to the cambium layer around the scaffoldlimbs or trunk to increase fruit size is done in February and/or March. The laborers use girdling knives to stripthe bark. Girdling begins in the fifth year of establishment.

Irrigation. Water is pumped from a reservoir, through an infiltration system into the micro-sprinklersystem. In this study water costs $2.92 per acre-inch ($35 per acre-foot) and the pumping cost from thereservoir $3.63 per acre-inch. The irrigation costs includes the water, pumping costs, and irrigation labor. Atotal of 36 acre-inches of water is applied to the orchard. Water costs in the San Joaquin Valley vary by waterdistrict and costs to the grower can range from $30 to $200 per acre-foot. No assumption is made abouteffective rainfall, evaporation, and runoff.

Fertilization. Nitrogen as UN-32 at 75 pounds per acre is applied in July through the micro-sprinklers.Some growers apply calcium as a foliar spray with the pesticide applications and/or as a soil application.Potassium sulfate may also be needed in some areas. Fertilizer rates in this study are typical nutrientrequirements, but do not take into account soil and water nitrogen. Leaf samples are taken in July for nutrientanalysis and the fertilizers should be applied according to analysis recommendations. Leaf samples in thisstudy are calculated at one per 10 acres and analyzed for both major and minor nutrients. The cost includes thelabor to collect and prepare the samples and the lab fees

Pest Management. The pesticides and rates mentioned in this cost study as well as other availablepesticides, pest identification, monitoring, and management are available on the UC Integrated Pest

Table C. Annual Yields

Year Tons3 1.54 3.05 4.5

6+ 7.0


Management website at www.ipm.ucdavis.edu. For information and pesticide use permits, contact the localcounty agricultural commissioner's office. Adjuvants – spreaders, stickers, buffers – may be used with somepesticide and herbicide applications but are not included as a cost in this study.

Pest Control Adviser (PCA). Written recommendations are required for many pesticides and are madeby licensed pest control advisers. In addition the PCA will monitor the field for agronomic problems includingpests and nutrition. Growers may hire private PCA’s or receive the service as part of a service agreement withan agricultural chemical and fertilizer company. The grower in this study uses the service of the chemical andfertilizer company. A typical PCA fee for tree crops is $35 to $45 per acre, but varies depending on the amountof service provided.

Weeds. A dormant strip spray using pre-emergent herbicides (Surflan, Goal) to control weeds in the treerows is applied in January. In February, March, April, and May, post emergent spot sprays (Roundup) areapplied on the berms. Resident species are grown as a ground cover in the middles and are mowed three times(February, April, June prior to harvest).

Insects. Asana for peach twig borer control is applied in February with the delayed dormant diseasespray. Imidan is applied in May for worm control (peach twig borer and leaf rollers)

Disease. A delayed dormant spray using Superior Oil, and Kocide (Copper) is applied with the insectspray in February. Rally and Vangard are applied mid-March (bloom) to control brown rot, shot hole, andpowdery mildew. A second treatment for brown rot and shothole using Break and Ziram is applied in March,and Rally is applied again in April for mildew.

Vertebrate Pest. Poison squirrel bait is applied in the spring by hand using the ATV.

Harvest. Harvest in the northern San Joaquin Valley begins in late May or early June and in thesouthern San Joaquin Valley in late April. The fruit is harvested over several pickings; each tree may be picked2 to 5 times during the harvest. A contract labor crew of 18 to 25 pickers plus crew boss picks the crop. Inaddition the grower furnishes three tractors and drivers, three bin trailers, bins, and a forklift. The bins andforklift are not included in the harvest costs but are shown as an investment expense (Non-Cash Overhead). Itis assumed that one crew picks 2.2 tons per hour and that all of the grower equipment will be operating duringthe picking time. Larger acreages will require more crews and equipment. The fruit is hauled to the packingshed by a contract operator.

Yields and Returns. Yields for fresh market apricots range from 5 to 9 tons per acre. A typical yieldaveraged over the production life of the orchard and used in this study is 7 tons. An estimated price of a $1,000per ton based on 2000 to 2002 average prices for fresh marketed fruit reported in the local AgriculturalCommissioners Crop Reports and 2003 USDA market quotes is used in this study to determine potentialprofits/losses. Returns will vary depending on the market, fruit quality, and yield.

Packing Shed. Costs are not included in this study. Packing will cost $3 to $4 per 25-pound box.Additional costs will be added for cooling and marketing.

Assessment. The California Fresh Apricot Council has a voluntary assessment of $0.15 cents per 24-pound box to fund their activities. The assessment is not included as a cost.


ATV/Pickup. The ATV is used for baiting gophers and is included in that cost. Additional ATV usefor monitoring the orchard and checking the irrigation system is shown under ATV and assumes the ATVtravels 500 miles per year or 25 miles per acre. Business use of the pickup is assumed to be 20 miles per acre.

Labor. Labor rates of $13.77 per hour for machine operators and $9.75 for general labor includespayroll overhead of 45%. The basic hourly wages are $9.50 for machine operators and $6.75 for general labor.The overhead includes the employers’ share of federal and California state payroll taxes, workers' compensationinsurance for orchard/fruit crops (code 0016), and a percentage for other possible benefits. Workers’compensation costs will vary among growers, but for this study the cost is based upon the average industry finalrate as of January 1, 2003 (California Department of Insurance). Labor for operations involving machinery are20% higher than the operation time given in Table 2 to account for the extra labor involved in equipment set up,moving, maintenance, work breaks, and field repair.

Equipment Operating Costs. Repair costs are based on purchase price, annual hours of use, total hoursof life, and repair coefficients formulated by the American Society of Agricultural Engineers (ASAE). Fuel andlubrication costs are also determined by ASAE equations based on maximum PTO horsepower and fuel type.Prices for on-farm delivery of diesel and gasoline are $1.11 and $1.58 per gallon, respectively. The fuel pricesare a January 2003 average based on four California delivery locations. The cost includes a 2.25% sales tax(effective September 2001) on diesel fuel and 7.25% sales tax on gasoline. Gasoline also includes federal andstate excise tax, which can be refunded for on-farm use when filing your income tax. The fuel, lube, and repaircost per acre for each operation in the “Cost Per Acre to Produce” table is determined by multiplying the totalhourly operating cost in the “Hourly Equipment Costs” table for each piece of equipment used from theOperation Time (Hrs/A) column by the hours per acre. Tractor time is 10% higher than implement time for agiven operation to account for setup, travel and down time.

Interest On Operating Capital . Interest on operating capital is based on cash operating costs and iscalculated monthly until harvest at a nominal rate of 7.14% per year. A nominal interest rate is the typicalmarket cost of borrowed funds. The interest cost of post harvest operations is discounted back to the last harvestmonth using a negative interest charge.

Risk. Production risks should not be minimized. While this study makes every effort to model aproduction system based on typical, real world practices, it cannot fully represent financial, agronomic andmarket risks, which affect the profitability and economic viability of crop production.

Cash Overhead Costs(Tables 1-7)

Cash overhead consists of various cash expenses paid out during the year that are assigned to the wholefarm and not to a particular operation. These costs include property taxes, interest on operating capital, officeexpense, liability and property insurance, sanitation services, equipment repairs, and management.

Property Taxes. Counties charge a base property tax rate of 1% on the assessed value of the property.In some counties special assessment districts exist and charge additional taxes on property including equipment,buildings, and improvements. For this study, county taxes are calculated as 1% of the average value of theproperty. Average value equals new cost plus salvage value divided by 2 on a per acre basis.


Insurance. Insurance for farm investments varies depending on the assets included and the amount ofcoverage. Property insurance provides coverage for property loss and is charged at 0.676% of the average valueof the assets over their useful life. Liability insurance covers accidents on the farm and costs $516 for the entirefarm.

Crop Insurance. The insurance is based on reported grower costs. The amount of coverage is notdefined in this study.

Office Expense. Office and business expenses are estimated at $105 per producing acre. Theseexpenses include office supplies, telephones, bookkeeping, accounting, legal fees, shop and office utilities, andmiscellaneous administrative charges.

Sanitation Services. Contract labor is used on the farm in which the contractor furnishes the sanitationfacilities, therefore a cost is not shown in this study. Sanitation services that provide single portable toilets andwashbasin for the orchard cost approximately $112 per month. The monthly service charge is an average offour to six California sanitation companies and locations.

Management/Supervisor Salaries. The grower farms the orchard; therefore no salaries are includedfor management. Returns above costs are considered a return to management.

Investment Repairs. Annual maintenance is calculated as two percent of the purchase price.

Non-Cash Overhead Costs

Non-cash overhead is calculated as the capital recovery cost for equipment and other farm investments.

Capital Recovery Costs. Capital recovery cost is the annual depreciation and interest costs for a capitalinvestment. It is the amount of money required each year to recover the difference between the purchase priceand salvage value (unrecovered capital). It is equivalent to the annual payment on a loan for the investmentwith the down payment equal to the discounted salvage value. This is a more complex method of calculatingownership costs than straight-line depreciation and opportunity costs, but more accurately represents the annualcosts of ownership because it takes the time value of money into account (Boehlje and Eidman). The formulafor the calculation of the annual capital recovery costs is ((Purchase Price – Salvage Value) x Capital RecoveryFactor) + (Salvage Value x Interest Rate).

Salvage Value. Salvage value is an estimate of the remaining value of an investment at the end of itsuseful life. For farm machinery (tractors and implements) the remaining value is a percentage of the new costof the investment (Boehlje and Eidman). The percent remaining value is calculated from equations developedby the American Society of Agricultural Engineers (ASAE) based on equipment type and years of life. The lifein years is estimated by dividing the wear out life, as given by ASAE by the annual hours of use in thisoperation. For other investments including irrigation systems, buildings, and miscellaneous equipment, thevalue at the end of its useful life is zero. The salvage value for land is the purchase price because land does notdepreciate. The purchase price and salvage value for equipment and investments are shown in the tables.


Capital Recovery Factor. Capital recovery factor is the amortization factor or annual payment whosepresent value at compound interest is 1. The amortization factor is a table value that corresponds to the interestrate used and the life of the machine.

Interest Rate. The interest rate of 6.41% used to calculate capital recovery cost is the USDA-ERS’s ten-year average of California’s agricultural sector long-run rate of return to production assets from current income.It is used to reflect the long-term realized rate of return to these specialized resources that can only be usedeffectively in the agricultural sector. In other words, the next best alternative use for these resources is inanother agricultural enterprise.

Establishment Cost. Costs to establish the orchard are used to determine capital recovery expenses,depreciation, and interest on investment for the production years. Establishment cost is the sum of the costs forland preparation, planting, trees, cash overhead and production expenses for growing the trees through the firstyear that apricots are harvested minus any returns from production. The Total Accumulated Net Cash Cost onTable 1, in the third year represents the establishment cost. For this study the cost is $3,046 per acre or $60,920for the 20-acre orchard. The establishment cost is spread over the remaining 17 years of the 20 years theorchard is in production.

Irrigation System. Micro-sprinkler lines are laid out prior to planting. The labor cost for laying outthe line and changing from bubblers to micro-sprinkler is included in the irrigation system cost. A 25horsepower pump, reservoir and filtration/injector station is newly installed and is shown as a pumping station.The pumping station is assumed to be sufficient for 40 acres of crop production, although portions of the systemmay be capable of providing for a larger portion of the ranch. The water flows into the reservoir from thedistrict and the water is pumped from the reservoir into the system.

Land. Land values for cropland with district water in the San Joaquin Valley in the southern regionrange from $2,300 to $5,000 per acre and in the northern region, $5,000 to 9,500. Land in this study is valuedat $5,900 per acre or $6,211 per producing acre..

Building. The buildings total 2,400 square feet and are metal building/buildings on a cement slab.

Tools. This includes shop tools, hand tools, and miscellaneous field tools such as pruning tools.

Fuel Tanks. Two 350-gallon fuel tanks using gravity feed are on metal stands. The tanks are setup in acement containment pad that meets federal, state, and county regulations.

Equipment. Farm equipment is purchased new or used, but the study shows the current purchase pricefor new equipment. The new purchase price is adjusted to 60% to indicate a mix of new and used equipment.Annual ownership costs for equipment and other investments are shown in Tables 3 and 8. Equipment costs arecomposed of three parts: non-cash overhead, cash overhead, and operating costs. Both of the overhead factorshave been discussed in previous sections. The operating costs consist of repairs, fuel, and lubrication and arediscussed under operating costs.

Table Values. Due to rounding, the totals may be slightly different from the sum of the components.


REFERENCES

Agricultural Commissioner. Annual Crop Reports, Kern County 2000-2002, Fresno County 2000-2002, TulareCounty 2000-2002.

American Society of Agricultural Engineers. 1994. American Society of Agricultural Engineers StandardsYearbook. Russell H. Hahn and Evelyn E. Rosentreter (ed.) St. Joseph, Missouri. 41st edition.

American Society of Farm Managers and Rural Appraisers. 2003. Trends in Agricultural Land & Lease Values.California Chapter of the American Society of Farms Managers and Rural Appraisers. Woodbridge, CA.

Barker, Doug. April 22, 2003. California Workers’ Compensation Rating Data for Selected AgriculturalClassifications as of January 1, 2003. California Department of Insurance, Rate Regulation Branch.

Boelje, Michael D., and Vernon R. Eidman. 1984. Farm Management. John Wiley and Sons. New York, NewYork

Hesse, C. O. 1952. Apricot Culture in California. California Agricultural Experiment Station Extension Service,Davis, CA. Circular 412

University of California Statewide Integrated Pest Management Program. UC Pest Management Guidelines,Apricots. 2003. University of California, Davis, CA. http://www.ipm.ucdavis.edu

USDA Agricultural Marketing Service Archived Reports. http://www.ams.usda.gov/marketnews.htm. Internetaccessed August 6, 2003.

USDA-ERS. 2000. Farm Sector: Farm Financial Ratios. Agriculture and Rural Economics Division, ERS.USDA. Washington, DC http://www.ers.usda.gov/data/farmbalancesheet/fbsdmu.htm; Internet; accessed January4, 2003.

For information concerning the above mentioned University of California publications contact UC DANR CommunicationsServices (1-800-994-8849) or your local county Cooperative Extension office.


UC COOPERATIVE EXTENSION Table 1. SAMPLE COSTS PER ACRE TO ESTABLISH AN APRICOT ORCHARD

SAN JOAQUIN VALLEY - 2003

Cost Per AcreCrop Year = January to December Year: 1st 2nd 3rd 4th

Yield (tons): 1.50 3.00

Planting Costs: Orchard Removal 265 Land Preparation - Subsoil 2X 300 Land Preparation - Disc 2X 40 Land Preparation - Level 160 Land Prep-Fumigate 200 Land Prep-Berms 15 Trees: 145 Per Acre @ $4.25 ea., (3 in 2nd year) 616 13 Survey, Mark, Dig Holes & Plant 268 15

TOTAL PLANTING COSTS 1,864 28 Cultural Costs: Pruning, Training 39 69 137 225 Brush Disposal 5 5 Fertilizer - Nitrogen 10 9 14 25 Thin Fruit-Hand 17 34 Weed Control - Winter Strip Spray 96 96 96 96 Weed Control - Mow Middles 15 15 15 15 Weed Control - In-Season Spot Sprays 45 45 45 45 Disease Control - Dormant (Asana, Oil, Kocide) 32 44 57 Irrigate 149 176 219 256 Insect Control - PTB (Asana) 18 Disease Control - Brown Rot, Mildew (Rally, Ziram) 37 47 Rodent Control 13 13 13 Pickup Truck Use 15 15 15 15 ATV Use 36 36 36 36

TOTAL CULTURAL COSTS 405 506 693 887Harvest Costs:Pick and Haul 238 476

TOTAL HARVEST COSTS 238 476

Interest On Operating Capital @ 7.14% 97 7 9 12TOTAL OPERATING COSTS/ACRE 2,366 541 940 1,375Cash Overhead Costs: Office Expense 105 105 105 105 Liability Insurance 5 5 5 5 Property Taxes 85 76 78 79 Property Insurance 16 10 11 11 Investment Repairs 34 34 35 35

TOTAL CASH OVERHEAD COSTS 245 230 234 235TOTAL CASH COSTS/ACRE 2,611 771 1,174 1,610

INCOME/ACRE FROM PRODUCTION 1,500 3,000NET CASH COSTS/ACRE FOR THE YEAR 2,611 771

PROFIT/ACRE ABOVE CASH COSTS 326 1,390ACCUMULATED NET CASH COSTS/ACRE 2,611 3,382 3,056 1,666


UC COOPERATIVE EXTENSIONTable 1. continued

Cost Per Acre

Year: 1st 2nd 3rd 4thYield (ton): 1.50 3.00

Capital Recovery Land 388 388 388 388 Shop Building 49 49 49 49 Fuel Tanks 1 1 1 1 Sprinkler Irrigation System 53 53 53 53 Irrigation Pumping Plant 33 33 33 33 Shop/Hand Tools 9 9 9 9 Bins 9 9 Forklift 20 20 20 20 Equipment 233 123 114 121

TOTAL INTEREST ON INVESTMENT 786 676 676 683TOTAL COST/ACRE FOR THE YEAR 3,397 1,447 1,850 2,293INCOME/ACRE FROM PRODUCTION 1,500 3,000TOTAL NET COST/ACRE FOR THE YEAR 3,397 1,447 350

NET PROFIT/ACRE ABOVE TOTAL COST 707TOTAL ACCUMULATED NET COST/ACRE 3,397 4,844 5,194 4,487


UC COOPERATIVE EXTENSIONTable 2. COSTS PER ACRE TO PRODUCE APRICOTS


Operation Cash and Labor Costs per acreTime Labor Fuel, Lube Material Custom/ Total Your

Operation (Hrs/A) Cost & Repairs Cost Rent Cost CostCultural:

Pest:Delayed Dormant (Asana, Oil, Kocide) 0.33 6 3 49 0 58

Pest:Brown Rot/Shothole/Mildew (Rally,Vangard) 0.33 6 3 40 0 49

Pest:Brown Rot/Shothole (Break, Ziram) 0.33 6 3 40 0 49

Pest:Mildew (Rally) 0.33 6 3 20 0 28

Pest:Worm-PTB/OLR 0.33 6 3 38 0 47

Pest:Rodent Bait 0.42 7 1 6 0 13

Weed-Strip 30% acres (Goal, Surflan) 0.25 4 1 90 0 96

Weed:Strip-Spot (Roundup) 1.02 17 6 38 0 61

Weed:Mow Middles 0.74 12 8 0 0 20

Thin Fruit:Hand 0.00 0 0 899 0 899

Girdle Tree 0.00 0 0 145 0 145

Irrigate 2.10 21 0 236 0 256

Leaf Analysis 0.04 0 0 3 0 3

Fertilize- through micro sprinklers (UN32) 0.01 0 0 23 0 24

Top Trees 0.00 0 0 45 0 45

Prune 0.00 0 0 326 0 326

Chop Brush 0.33 6 3 0 0 9

ATV Miscellaneous Use 1.00 17 2 0 0 18

Pickup Use 0.67 11 4 0 0 15

TOTAL CULTURAL COSTS 8.24 122 40 1,999 0 2,160

Harvest:Harvest:Hand Pick 0.00 0 0 910 0 910

Harvest:Equipment 9.54 158 47 0 0 205

Harvest:Haul 0.00 0 0 70 0 70

TOTAL HARVEST COSTS 9.54 158 47 980 0 1,185

Interest on operating capital @ 7.14% 40

TOTAL OPERATING COSTS/ACRE 279 87 2,979 0 3,385

CASH OVERHEAD:Office Expense 105

Liability Insurance 5

Crop Insurance 45

Property Taxes 96

Property Insurance 23

Investment Repairs 35

TOTAL CASH OVERHEAD COSTS 309

TOTAL CASH COSTS/ACRE 3,694 NON-CASH OVERHEAD (Investments): Producing Annual Cost

Acre Capital Recovery

Buildings 547 49 49

Fuel Tanks 21 1 1

Shop/Field Tools 68 9 9

Forklift-Field 221 20 20

Irrigation System -Micro sprinklers 600 53 53

Irrigation System - Pump Station 375 33 33

Bins (30) 1,000 lb 63 9 9

Land 6,211 388 388

Establishment Costs 3,056 297 297

Equipment 1,487 152 152

TOTAL NON-CASH OVERHEAD COSTS 12,650 1,012 1,012 TOTAL COSTS/ACRE 4,706


UC COOPERATIVE EXTENSIONTable 3. COSTS AND RETURNS PER ACRE TO PRODUCE APRICOTS


Quantity Price or Value or Your /Acre Unit Cost/Unit Cost/Acre Cost

GROSS RETURNSApricots - Fresh 7.00 ton 1,000.00 7,000

OPERATING COSTSInsecticide:Asana XL 10.00 floz 1.04 10

Superior Spray Oil 5.00 gal 3.19 16

Imidan 70W 4.25 lb 9.00 38

Fungicide:Kocide 101 8.00 lb 2.89 23

Rally 40W 8.00 oz 4.90 39

Vangard WG 5.00 oz 4.09 20

Break EC 4.00 floz 4.90 20

Ziram 76DF 6.00 lb 3.39 20

Rodenticide:Rodent Bait-Wilco 1.00 lb 5.62 6

Herbicide:Surflan AS 3.60 pt 16.96 61

Goal 2XL 1.80 pt 16.25 29

Roundup Ultra Max 4.32 pt 8.75 38

Contract/Custom:Thin Fruit 145.00 tree 6.20 899

Girdle Tree 145.00 tree 1.00 145

Leaf Analysis (1 sample/10 acres) 0.10 each 30.00 3

Top Trees Mechanical 1.00 acre 45.00 45

Prune 145.00 tree 2.25 326

Harvest Hand 7.00 ton 130.00 910

Haul Fruit 7.00 ton 10.00 70

Irrigation:Water-District 36.00 acin 2.92 105

Water-PGE Pumping 36.00 acin 3.63 131

Fertilizer:UN-32 75.00 lb N 0.31 23

Labor (machine) 18.76 hrs 13.77 258

Labor (non-machine) 2.15 hrs 9.79 21

Fuel - Gas 2.56 gal 1.58 4

Fuel - Diesel 43.23 gal 1.11 48

Lube 8

Machinery repair 27

Interest on operating capital @ 7.14% 40

TOTAL OPERATING COSTS/ACRE 3,385

NET RETURNS ABOVE OPERATING COSTS 3,615

CASH OVERHEAD COSTS:Office Expense 105

Liability Insurance 5

Crop Insurance 45

Property Taxes 96

Property Insurance 23

Investment Repairs 35

TOTAL CASH OVERHEAD COSTS/ACRE 309

TOTAL CASH COSTS/ACRE 3,694


UC COOPERATIVE EXTENSIONTable 3. continued

Quantity Price or Value or Your /Acre Unit Cost/Unit Cost/Acre Cost

NON-CASH OVERHEAD COSTS (Capital Recovery)Buildings 49

Fuel Tanks 1

Shop/Field Tools 9

Forklift-Field 20

Irrigation System -Micro sprinklers 53

Irrigation System - Pump Station 33

Bins (30) 1,000 lb 9

Land 388

Establishment Costs 297

Equipment 152

TOTAL NON-CASH OVERHEAD COSTS/ACRE 1,012

TOTAL COSTS/ACRE 4,706

NET RETURNS ABOVE OPERATING COSTS 2,294


UC COOPERATIVE EXTENSIONTable 4. MONTHLY CASH COSTS PER ACRE TO PRODUCE APRICOTS

SAN JOAQUIN VALLEY - 2003 Beginning JAN 03 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTALEnding DEC 03 03 03 03 03 03 03 03 03 03 03 03 03

Pest:Delay Dormant (Asana,Oil,Kocide) 58 58

Pest:BrnRot/Shothole/Mildw (Rally,Vangard) 49 49

Pest:BrnRot/Shothole (Break,Ziram) 49 49

Pest:Mildew (Rally) 28 28

Pest:Worm-PTB/OLR (Asana) 47 47

Pest:Rodent Bait 13 13

Weed-Strip 30% acre (Goal,Surflan) 96 96

Weed:Strip-Spot (Roundup) 15 15 15 15 61

Weed:Mow Middles 5 5 5 5 20

Thin Fruit:Hand 899 899

Girdle Tree 145 145

Irrigate 18 37 55 18 18 37 18 18 256

Leaf Analysis 3 3

Fertilize UN32 24 24

Top Trees 45 45

Prune 326 326

Chop Brush 9 9

ATV Miscellaneous Use 2 2 2 2 2 2 2 2 2 2 2 2 18

Pickup Use 1 1 1 1 1 1 1 1 1 1 1 1 15

TOTAL CULTURAL COSTS 99 99 1,201 119 125 21 11 347 30 3 3 3 2,160

Harvest:Harvest:Hand Pick 910 910

Harvest:Equipment 205 205

Harvest:Haul 70 70

TOTAL HARVEST COSTS 1,185 1,185

Interest on operating capital 1 1 8 9 10 17 -3 -2 0 0 0 0 40

TOTAL OPERATING COSTS/ACRE 99 100 1,209 128 134 1,223 108 345 30 3 3 3 3,385

OVERHEAD:Office Expense 12 12 12 12 12 12 12 12 12 105

Liability Insurance 5 5

Crop Insurance 45 45

Property Taxes 48 48 96

Property Insurance 23 23

Investment Repairs 3 3 3 3 3 3 3 3 3 3 3 3 35

TOTAL CASH OVERHEAD COSTS 37 60 15 63 15 15 20 15 15 3 3 51 309

TOTAL CASH COSTS/ACRE 137 160 1,224 191 149 1,237 129 360 44 6 6 53 3,694


UC COOPERATIVE EXTENSIONTable 5. RANGING ANALYSISSAN JOAQUIN VALLEY - 2003

COSTS PER ACRE AT VARYING YIELDS TO PRODUCE APRICOTS

YIELD (ton/acre)4.00 5.00 6.00 7.00 8.00 9.00 10.00

OPERATING COSTS/ACRE:Cultural Cost 2,160 2,160 2,160 2,160 2,160 2,160 2,160

Harvest Cost 657 833 1,009 1,185 1,360 1,536 1,712

Interest on operating capital 36 38 39 40 41 41 42

TOTAL OPERATING COSTS/ACRE 2,853 3,031 3,208 3,385 3,561 3,737 3,914

Total Operating Costs/Ton 713 606 535 484 445 415 391

CASH OVERHEAD COSTS/ACRE 308 309 309 309 310 310 310

TOTAL CASH COSTS/ACRE 3,161 3,340 3,517 3,694 3,871 4,047 4,224

Total Cash Costs/Ton 790 668 586 528 484 450 422

NON-CASH OVERHEAD COSTS/ACRE 1,003 1,006 1,009 1,012 1,015 1,017 1,020

TOTAL COSTS/ACRE 4,164 4,346 4,526 4,706 4,886 5,064 5,244

Total Costs/Ton 1,041 869 754 672 611 563 524

NET RETURNS PER ACRE ABOVE OPERATING COSTS

YIELD (ton/acre)$/ton 4.00 5.00 6.00 7.00 8.00 9.00 10.00

600.00 -453 -31 392 815 1,239 1,663 2,086 700.00 -53 469 992 1,515 2,039 2,563 3,086 800.00 347 969 1,592 2,215 2,839 3,463 4,086 900.00 747 1,469 2,192 2,915 3,639 4,363 5,0861,000.00 1,147 1,969 2,792 3,615 4,439 5,263 6,0861,100.00 1,547 2,469 3,392 4,315 5,239 6,163 7,0861,200.00 1,947 2,969 3,992 5,015 6,039 7,063 8,086

NET RETURNS PER ACRE ABOVE CASH COSTS


600.00 -761 -340 83 506 929 1,353 1,776 700.00 -361 160 683 1,206 1,729 2,253 2,776 800.00 39 660 1,283 1,906 2,529 3,153 3,776 900.00 439 1,160 1,883 2,606 3,329 4,053 4,7761,000.00 839 1,660 2,483 3,306 4,129 4,953 5,7761,100.00 1,239 2,160 3,083 4,006 4,929 5,853 6,7761,200.00 1,639 2,660 3,683 4,706 5,729 6,753 7,776

NET RETURNS PER ACRE ABOVE TOTAL COSTS


600.00 -1,764 -1,346 -926 -506 -86 336 756 700.00 -1,364 -846 -326 194 714 1,236 1,756 800.00 -964 -346 274 894 1,514 2,136 2,756 900.00 -564 154 874 1,594 2,314 3,036 3,7561,000.00 -164 654 1,474 2,294 3,114 3,936 4,7561,100.00 236 1,154 2,074 2,994 3,914 4,836 5,7561,200.00 636 1,654 2,674 3,694 4,714 5,736 6,756


UC COOPERATIVE EXTENSIONTable 6. WHOLE FARM ANNUAL EQUIPMENT, INVESTMENT AND BUSINESS OVERHEAD


ANNUAL EQUIPMENT COSTS

Cash OverheadYrs Salvage Capital Insur-

Yr Description Price Life Value Recovery ance Taxes Total

03 35HP 4WD Tractor 20,500 20 2,630 1,754 78 116 1,948

03 55HP 5320 2WD Tractor 24,605 20 3,157 2,105 94 139 2,338

03 75HP JD5510 MFWD 42,000 20 5,389 3,594 160 237 3,991

03 ATV 550 Kawasaki 5,790 15 1,127 558 23 35 616

03 Bin Trailer (3-Bin) #1 1,600 20 83 140 6 8 154

03 Bin Trailer (3-Bin) #2 1,600 20 83 140 6 8 154

03 Bin Trailer (3-Bin) #3 1,600 20 83 140 6 8 154

03 Mower/Flail 8' 9,000 15 864 905 33 49 988

03 Orchard Sprayer 500 Gallon 19,741 20 1,029 1,729 70 104 1,903

03 Pickup Truck 1/2 Ton 25,740 10 7,603 2,969 113 167 3,248

03 Weed Sprayer 100 Gallon 3,550 15 341 357 13 19 390

TOTAL 155,726 22,389 14,392 602 891 15,885

60% of New Cost * 93,436 13,433 8,635 361 534 9,531*Used to reflect a mix of new and used equipment

ANNUAL INVESTMENT COSTS

Cash Overhead Yrs Salvage Capital Insur-

Description Price Life Value Recovery ance Taxes Repairs Total

Bins (30) 1,000 lb 6,000 10 825 20 30 120 995

Buildings 2,400 sqft 52,000 20 4,626 176 260 781 5,843

Orchard Establishment 61,120 17 5,939 207 306 0 6,451

Forklift-Field 2-Ton 21,000 20 1,868 71 105 420 2,464

Fuel Tanks 2-350 gallon 2,000 35 300 139 8 11 40 199

Irrigation Pump Station 15,000 20 1,334 51 75 300 1,760

Irrigation System/Micro Sprinklers 12,000 20 1,068 41 60 240 1,408

Land 590,000 20 590,000 36,875 0- 5,900 0 42,775

Shop/Field Tools 6,500 10 894 22 33 130 1,078

TOTAL INVESTMENT 765,620 590,300 53,568 596 6,780 2,031 62,973

ANNUAL BUSINESS OVERHEAD COSTS

Units/ Price/ TotalDescription Farm Unit Unit Cost

Crop Insurance 20 acre 45.00 900

Liability Insurance 95 acre 5.43 516

Office Expense 95 acre 105.00 10,000


UC COOPERATIVE EXTENSION

Table 6. HOURLY EQUIPMENT COSTSSAN JOAQUIN VALLEY - 2003

COSTS PER HOUR

Actual Cash Overhead OperatingHours Capital Insur- Fuel & Total Total

Yr Description Used Recovery ance Taxes Repairs Lube Oper. Costs/Hr.

03 35HP 4WD Tractor 799.60 1.32 0.06 0.09 0.47 2.19 2.66 4.13

03 55HP 5320 2WD Tractor 599.50 2.11 0.09 0.14 1 3.45 4.45 6.79

03 75HP JD5510 MFWD 799.80 2.70 0.12 0.18 0.97 4.7 5.67 8.67

03 ATV 550 Kawasaki 133.40 2.51 0.11 0.16 0.41 1.14 1.55 4.32

03 Bin Trailer (3-Bin) #1 149.80 0.56 0.02 0.03 0.23 0 0.23 0.85

03 Bin Trailer (3-Bin) #2 149.80 0.56 0.02 0.03 0.23 0.00 0.23 0.8503 Bin Trailer (3-Bin) #3 149.80 0.56 0.02 0.03 0.23 0.00 0.23 0.8503 Mower/Flail 8' 133.4 4.07 0.15 0.22 4.03 0 4.03 8.4803 Orchard Sprayer 500 Gallon 100.3 10.34 0.42 0.62 3.09 0 3.09 14.4703 Pickup Truck 1/2 Ton 13.3 133.62 5.07 7.5 1.07 4.54 5.61 151.8103 Weed Sprayer 100 Gallon 100.4 2.13 0.08 0.12 0.93 0 0.93 3.26


UC COOPERATIVE EXTENSIONTable 8. OPERATIONS WITH EQUIPMENT


Operation EquipmentOperation Month Tractor Implement Material Rate/acre UnitCultural:

Pest- Delayed Dormant February 75HP MFWD Orchard Sprayer Asana XL 10.00 flozKocide 101 8.00 lbSuperior Oil 5.00 gal

Pest-Brown, Shothole, Mildew March 75HP MFWD Orchard Sprayer Vangard 5.00 ozRally 4.00 oz

Pest-Brown Rot, Shothole 75HP MFWD Orchard Sprayer Break EC 4.00 flozZiram 6.00 lb

Pest-Mildew April 75HP MFWD Orchard Sprayer Rally 4.00 oz

Pest-Worm (PTB, OLR) May 75HP MFWD Orchard Sprayer Imidan 4.25 lb

Pest-Rodent April ATV Rodent Bait 1.00 lb

Weed-Spray Tree Row (30% acres) January 55HP 2WD Weed Sprayer Surflan 3.60 pintGoal 2XL 1.80 pint

Weed - Strip Spot Spray February 55HP 2WD Weed Sprayer Roundup UltraMax 1.08 pintMarch 55HP 2WD Weed Sprayer Roundup UltraMax 1.08 pintApril 55HP 2WD Weed Sprayer Roundup UltraMax 1.08 pintMay 55HP 2WD Weed Sprayer Roundup UltraMax 1.08 pint

Weed - Mow Middles February 75HP MFWD Mower/Flail

Weed - Mow Middles March 75HP MFWD Mower/FlailApril 75HP MFWD Mower/FlailMay 75HP MFWD Mower/Flail

Thin Fruit - Hand March Labor -Contract

Girdle Tree - Hand March Labor-ContractIrrigate February Water + Labor 2.57 acin

March Water + Labor 5.15 acinApril Water + Labor 7.71 acinMay Water + Labor 7.71 acinJune Water + Labor 2.57 acinJuly Water + Labor 5.15 acinAugust Water + Labor 2.57 acinSeptember Water + Labor 2.57 acin

Leaf Analysis July Analysis + Labor

Fertilize UN32 through drip July UN32 75.00 lb N

Top Trees July Custom

Prune August Custom

Shred Prunings September 75HP MFWD Mower/Flail

Harvest June Contract

Haul Contract

Harvest Equipment 35HP 4WD Bin Trailer55HP 2WD Bin Trailer

75HP MFWD Bin Trailer

2003 SAMPLE COSTS TO ESTABLISH AN APRICOT ORCHARD AND PRODUCE APRICOTS · 2015-04-02 · 2003...

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Transcript of 2003 SAMPLE COSTS TO ESTABLISH AN APRICOT ORCHARD AND PRODUCE APRICOTS · 2015-04-02 · 2003...